Marc Bolland comes under pressure as profits fall at Marks & Spencer

Rosie Huntington-Whiteley models her lingerie collection 'Rosie for Autograph' designed in partnership with Marks & Spencer. Picture: PA
Rosie Huntington-Whiteley models her lingerie collection 'Rosie for Autograph' designed in partnership with Marks & Spencer. Picture: PA
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PRESSURE will mount this week on Marks & Spencer chief executive Marc Bolland, with the high-street stalwart tipped to unveil a double-digit fall in profits.

Analysts expect second-quarter sales at Britain’s biggest clothing retailer to show some improvement after the chain suffered its worst non-food trading for more than three years this spring.

However, stock control issues and tough competition are likely to have led to a first-half profit decline of 11 per cent to £280 million, according to a consensus of ten analysts. Even the most optimistic estimate is shy of the £315m posted a year earlier. That will not look good compared with recent relatively positive updates from rivals Asos, Debenhams and Next.

Bolland, who has held the top post since May 2010, has had a tough year. In May he slashed M&S’s three-year sales growth target, blaming the recession, and in July he shook up his general merchandise management team in the wake of the sales slump.

Former Debenhams and Jaeger boss Belinda Earl has been tasked with revitalising the group’s core womenswear range in the newly created role of style director. Earl’s 
appointment followed the 
departure of head of general merchandise Kate Bostock.

Retail experts are expecting a better second quarter thanks to improved market conditions, pencilling in a 
decline of just 2.5 per cent 
for general merchandise – compared with a 6.8 per cent fall in the first quarter – and a 1.5 per cent gain in food sales.

Investors will be looking for Bolland to provide a progress report on the action he is taking to improve buying and merchandising.

It is also unclear how much of the non-food improvement is down to internal efforts, with recent UK retail sales figures showing a bounce back in consumer spending across the high street in September and October thanks to falling inflation.

Analysts at stockbroker Shore Capital said: “Whether M&S quickly resolved merchandising and availability 
issues recorded in the spring and summer range remains to be seen.”

Societe Generale analysts appear more optimistic over the chain’s outlook. They said: “We anticipate better sale trends over the coming quarters, due to a combination of rising UK disposable income, self-help through store refurbishment, soft prior-year comparatives and – further out – product and availability improvements.”

Shares in M&S have risen by almost a fifth over the past three months, buoyed by persistent speculation regarding a possible offer from private equity firms or a sovereign wealth fund.